Bid to restore lost cash
Copyright 2000 Newcastle Chronicle & Journal Ltd
THE JOURNAL (Newcastle, UK)
June 27, 2000, Tuesday
Nick Woods, political Correspondent
REGENERATION bosses are calling for the North-East's wealth to be accurately assessed after claims that serious errors could have cost the North-East hundreds of millions of pounds in Euro cash.
As The Journal revealed yesterday, new research alleges that flawed Inland Revenue data overestimating wage figures in the region was used in the allocation of EU funds for needy regions for 11 years.
Economists argued that the North-East as a whole could have qualified for extra grants worth hundreds of millions of pounds.
Now agencies in charge of tackling the North-South divide are demanding tighter data collection to ensure the region wins its fair share of European aid.
Oxford University fellows Gavin Cameron and John Muellbauer say 12pc of sample tax records used to assess national and regional wealth could not be traced back to the place of residence. A national average was used to plug the hole, artificially raising wage figures in poorer areas like the North-East while depressing those in prosperous regions in the South from 1979-1990.
The academics claim the problem was resolved by the mid-1990s.
But the figures could have affected funding rounds in 1989 and 1994 with poorer regions losing out.
Mr Cameron said discussions about data collection were taking place with the Inland Revenue and the Office for National Statistics, which provides the EU with information, though new European methods are now in place.
David Bowles, business development director of regional development agency One NorthEast said: "Although this is an independent, academic report and it predates the establishment of the Regional Development Agencies, we are taking it at face value.
"It certainly underlines the need for accurate data to ensure that the region is eligible for, and receives, the appropriate amounts from all funding sources in the future."
North-East Regional Assembly chair Coun Mike Davey said: "If this is true then think of all the things we could have done with the money.
"These allocations in these years were for Objective One money, which is major European funding.
"I have been arguing for years we should be getting this."
A spokesman for the Inland Revenue said the organisation would not comment until it had been able to consider the report in detail.
A European aid package worth nearly £2.9bn for Britain's poorest regions was approved by the Brussels Commission yesterday.
The cash will be shared between Merseyside, South Yorkshire, West Wales and the Valleys and Cornwall and the Isles of Scilly.
It will generate 154,000 new jobs, according to the commission, and provide training in new skills for 420,000 people.
You can email me at Gavin.Cameron@economics.ox.ac.uk
Last updated: 28 September 2003.
